Roots2RealEstate

 Wages influence real estate prices over time.  Currently the “income to home value” ratio is way out of whack, and until this Valley can earn more money, prices are not going anywhere. 

Simply put, to buy a $650,000 home in San Jose, one or more individuals must make $120,000+ every year and have a good start of about $30,000 in savings as a down payment. When deciding to buy, plan on holding onto your commodity for at least 5-10 years, entrusting that you can pay for it. 

Real estate in the past has never been an investment where you could quickly double your money.  In fact, it was never meant to be a ”get rich quick” scheme either.  Real estate is really meant for the patient investor who thinks long-term.  In my opinion, when the fortune of ”getting rich quick” happens to a person, it seems that person often loses it as fast as they had come into it.  It turns out some people can not truly learn the lesson of holding on to wealth without fully experiencing what it takes to earn it.  You must diversify your portfolio (don’t put all your eggs in one basket), think long-term (7-10 years to start), dollar cost average (pay yourself consistantly by putting 10% of your money earned into a sound investment steadily in both good and bad economic times), and always be thirsty for knowledge, educating yourself with sound proven financial advice.  For example, take a course at a city college and read blogs and books on the very subject until your eyes pop out of your head.  Grasp at what it takes to make your money grow by having it work for you.

Thanks for reading my blog, by the way… I hope it inspires you to pass it on.

One of my insprirations is Rob Black and Your Money show, airs weekdays at 10 a.m. on Kron 4 channel.  His straight up advice and candid suggestions makes those who listen to him on a daily basis stand up, take heed in their financial future, and start thinking for themselves.  It’s the one of those live call in shows that you get to ask about your money matters, but be quick about it, Rob prefers those who has at least read one if not more of Ric Edelman books to be on board with his progressive way of thinking.  Check out his other list of must reads:  http://www.robblack.com/development/store.htm At his site www.RobBlack.com view past shows as a PodCast and learn more about his free investment seminars - and don’t worry he’s not selling you anything.  Just taking on, as his personal mission, educating the Bay Area to be more savvy and be healthy financially because we all know “one truly can’t help those without helping himself”.  In my opinion that’s probably what motivates Rob to get up and do what he does best, perhaps his main objective with his loyal 40,000 listeners - it’s easy to steer people in the direction of his way of thinking financially when given a half hour televised show weekly.   I’m sure it helps this  poor kids bottom line and  plays up his stocks sometimes.   Anyhow, don’t miss it,  if anything he’s got his thumb on the pulse of what is happening in our Silicon Valley market and also on those companies, many in our greater Bay Area, that are making money and affecting the world outside our Silicon Valley bubble.   

Happy Reading!

In an August 24th cnnMoney.com article columnist Gerri Willis says “There are a lot of events that a typical home insurance policy don’t cover.” She mentions a family that lost its home to a storm induced mudslide and says, “You may wonder why something like this isn’t covered by insurance. … But in fact, there are a lot of events that insurance doesn’t cover. Typical homeowner policies do not cover floods, earthquakes, mudslides, sinkholes, war or nuclear accidents. In the case of mudslides, you may be covered if you have flood insurance. But a flood policy will not cover damage if a hillside becomes saturated as a result of rainfall and slowly begins to move. That’s considered earth movement.” See the article for further discussion and suggestions.

Ever wonder if the homeowners insurance policy you purchased or your about to purchase is enough in case of a disaster? Know the difference between appraised value and market value.

Several hot things to do as summer cools off.  Read on if you want to get out there and have fun being yourself.

On Oct 6th, 2007 from 9 - 4 p.m. Harvest Harvest Fair and Exposition hide in a pumpkin patch, view exhibits of local school and 4H projects, live cooking demonstrations, winter vegetable farmers market, all day entertainment, pony rides, petting zoo, tours of the Park and historic farm house and barn.. 

This is a day of education as well and will also include environmental education displays such as Our City Forest, Cupertino Grange, several 4H Clubs, Home Composting Education Program and many more; all right in the middle of San Jose! 

Don’t forget to take advantage of a free thing: South First Fridays are an eclectic evening of arts and culture in downtown San Jose’s SoFA arts district, centered on South First Street. Held on the first Friday of every month, the arts venues on South First Street are all open from 8 until 11pm and offer free admission and a wide variety of live entertainment. It’s a lively scene attended by arts-lovers of all ages.

Looking to stretch the legs and get the juices flowing, you don’t have to go far to get a sense of wilderness.  Sunol Regional Wilderness is off of I-680, just  exit Calaveras Road/Hwy 84.  Go southeast to onto Geary Road which leads directly into the park.  Camp or hike, on one of their 6 trails for all experiences and skill level.  We liked Indian Joe Creek Trail with its gentle rise in elevation and when we had rested a bit, we tackled Eagle’s View Trail which leads through the “Valley of the Giants” to the best views of the park, Calaveras Reservoir and of the South Bay Area.  All in all, a nice surprise for an unexpected spot that we’d all normally zoom on by.

Lastly, an interesting exhibit and talk,

Our Cosmological Connections: Deep Space and Beyond
brought to you by Alan Holt, MS, FRC and taking place on October 19–21, 2007
at the Rosicrucian Park
This course will draw on known discoveries and supported theories, as well as on personal intuitions concerning astrophysical phenomena and the universe. Discussions of connections to human functioning and consciousness will be based on substantiated research in these areas, Rosicrucian precepts and knowledge, and personal research and experiences.  Such a heavy yet exciting topic, one that will keep you thinking for weeks there after.  Don’t want to leave the house to learn about this fascinating topic, netflicks one of my favorite movies, StarGate 2012, visit William Henry’s blogs or additional interesting phenomena by Will Hart.

Something to consider:
Look up Proposition 90 (it’s a tax law). This measure gives each county the option to allow seniors (defined as anyone over the age of 55) who move from another county to continue to pay property taxes at the rate they were paying on their previous home. This provides seniors an incentive to enter the real estate market because under Proposition 13 they would otherwise have a property tax rate based on the current market value of their newly purchased home, which is usually going to translate into significantly higher property taxes.

Only a few counties will allow you to do this, they are as follows:
Alameda
Kern
Los Angeles
Modoc
Orange
Monterey
San Mateo
San Diego
Santa Clara
Ventura

I don’t know if there are any towns/cities in these counties that you would consider. It would take some research by you, it’s best if you could visit these areas, and upon deciding your soon-to-be new neighborhood,  call me to check into home sale prices for you. It’s a start, I hope the help from me and the collective information in our blog can help you accomplish a smooth move .   

We have all heard about the problems of global warming, greenhouse gases, carbon emissions, and the high price of gasoline, which has provided an economic incentive to increase our energy efficiency and seek alternative sources of energy in every aspect of our lives. Pretending that environmental problems don’t exist, or just running away from them, won’t solve them. The scientific evidence of this growing threat is clear, and it has challenged us to consider the social and moral responsibility we share as stewards of a sustainable environment. Fortunately, the innovative spirit of Silicon Valley is hard at work at solving the crisis. Thanks to the many creative thinkers and the latest technology boom since the Internet. San Jose and the Bay Area is carving the way to win the title of being the Greenest City in America. I’d like to think it is possible for other cities to use us as their role models. We did it once before, right?

So you say you want to do what’s best for the environment, but often you don’t know where to start. And you don’t know what impact your efforts will have, or how much they will cost. I do believe you want to lessen the load you put on the earth, that you want to reduce global warming, and you want to live in a green home. Luckily we live in such a place where the very subject is being brought to life with new technology that will help us be a model for other cities to follow. Mike Honda and a distinguished panel of experts will share with us their expertise on alternative energy sources, carbon reduction and offsets, making your home more energy efficient, and more. In addition to Mike Honda’s Town Hall meetings, he will also be hosting a forum on “Green Living.” To learn about current and upcoming solutions that will allow us to live in a more environmentally friendly and energy efficient way. The panel will also help you understand the environmental benefits and economic trade-offs of your choices and how to make an impact starting with one home at a time.

http://mikehonda.blogspot.com/

The day you close on your new home is the first day of a new chapter in your life!  Why not start that chapter off right with a smooth and pain-free closing?  There is much to the process that can significantly impact the ease of closing, that a buyer or seller does not see.  In this post, I will outline the key things you need to know, and what you should expect, for a pain-free and easy real estate transaction. Contingencies - the sale of any home may include specific contract contingencies such as the buyer receiving financing, selling their current home, or a home inspection.  These conditions must be removed or waived before the sale can close.  You can ensure that the process goes smoothly by working aggressively to see that all of these items are completed as early as possible. Appraisal and Title Reports - completion of an appraisal to ensure the fair market value of the home and a title search to ensure clear title to the property must always be completed prior to closing. Closing Documents - typically a real estate attorney prepares documents that detail all of the transaction items.  Occasionally, this is done by outside service companies as well. Closings - closing generally takes place at an attorney’s office or at the office of the mortgage provider.  This is the acceptance of terms of sale by both parties and initiates the transfer of funds.  The final sale is actually complete; however, when funds are transferred and the deed recorded. A professional realtor like myself ensures a speedy and predictable closing by anticipating and resolving any potential issues in this process.  As an additional servic, I can offer you consulation in home-staging, organization, and minor home prep care to help you move into your new home.  Please contact me for more information about how I can ensure that your finding and closing upon a home goes smoothly. 

Visit http://www.amberlists.com/search/index.cfm?next=+IwwFqAoDMwDaDni5xzmAwww/  for a detailed web site chalk full of information and a handy search box for your questions. 

For those who are 60 and older, you may already be familiar with the HUD insured FHA adjustable rate reverse mortgage products that have been around for a while. New statistic claim states 68% of baby boomers plan to use their home equity for their retirement income. This ideal consumer now has a choice when it comes to Reverse Mortgages. The original R.M. product and the new Jumbo Reverse Mortgage program; both are presumably the same, except the J.R.M’s don’t have the limits like government funded secured reverse mortgages. The new J.R.M. is owned by banks, mortgage companies, and private companies and they are not a federally backed security. However, they offer for the first time a new fixed rate mortgage, some offer the loan with no closing costs, as well as some offer a guarantee of a growth rate of 9% on the line of credit annually. A product that is ideal for those baby boomers that are already in a reverse mortgage, and would like to refinance out of the adjustable rate to a fixed one. The other big advantage of using a J.R.M is that it locks in your home’s equity value at current market prices. This could potentially help those who plan on retiring soon, secure their futures in our current declining market, and (remember it’s harder to get a loan with no job, the downside to retiring). If you are turning 62 this upcoming year, it pays to look into a reverse mortgage. It allows you to plan for emergencies or have the money handy for that long-waited trip that’s been calling you. Tap into your equity without having to sell your home and move. If you do not need the money right away, no worries, lock in on the price of your home now and earn a growth of up to 9%. Contact your favorite mortgage broker or anyone of us, The Super Uber-Bloggers at Coldwell Banker’s New RealEstateCompass.com For another link to explain the Reverse Mortgage Loan Blog » Top 10 Reverse Mortgage Myths Dispelled at http://reversemortgageloanblog.com/2007/09/12/top-10-reverse-mortgage-myths-dispelled/And also check out: http://reversemortgagedaily.com/2007/05/28/non-fha-approved-brokers-able-to-originate-jumbo-reverse-mortgages/

And

http://reversemortgagedaily.wordpress.com/2007/01/29/more-jumbo-reverse-mortgage-products-coming-soon/

Wow what a ride it’s been…The latest reports from National Association of Realtors index of signed purchase agreements state resale homes have plunged down 12% in July; the most since records began in 2001.  This is 5% worse than the media’s economic forecast projection. The cause, many mortgage commitments were not able to perform at the closing last minute, and buyers fell out of contract at the 11th hour.  Ironically the same index reported last month that buyers in contract were up 5% in June.  It goes to show media i.e. what we watch and what we hear, does impact our financial futures.  We all know, misery loves company and that bad news sells more newspapers and gets more of us to watch.  Least no one is jumping out of buildings, yet.

 I must get asked at least four times a day my take on what is happening in the real estate market.  Well, all people need a roof over their head to sleep well, right?  And, people need to move in either rain or shine, and in good times and in bad times.  Those entrenched in the real estate market for over 20 years know, this too shall pass.  It’s bad news if you bought within the last two years under a sub-prime loan.  It’s bad news if you need to sell and have owned your home for less than four years.  However, there are those who are weathering this storm and even profiting from it.  The news is not showing that the higher end market is moving, a.k.a. “the rich” know to cash in on a downturn.  As the old saying goes “A true investor doesn’t wait for the very bottom to buy or the very top to sell”  Another motto that gets slung around, “If you want to be rich, do the exact opposite of what the majority is doing”, meaning the better time to buy is when the market goes down! 

Remember 1987?  When interest rates shot up from 8-9% to over 22% overnight - literally flattening the housing market for almost 10 years. Ironically, we had an oil crisis going on back then too.  Once it rebound in the early 90’s, we had a surplus in our budget, and the economy and stocks were doing great with the birth of the dot.com industry.  1% interest rate loans stimulated a lot of risk taking in the real estate market and helped those buy homes who couldn’t normally afford to.  It also fueled a very speculative market, one that we may never see again. (The, been there done that syndrome).   Us as agents had to be so aggressive and competitive in a raging sellers market for so long that we seem to forget what a normal market feels like.  So again, the question needs to be asked, what is a normal housing market for the Bay Area? 

Before the crazed days of too low of homes for sale as inventory, before the 1-4% interest rate loan products to fuel the economy, and before the creative sub-prime loans to make everyone’s dream to own a house a reality - a normal market was 5000 homes on the market at any given time.  It used to take 2-4 months from listing your home to closing escrow.  Last week we were running at 4700 for Santa Clara County. 4% of those listed accounted for the foreclosure market.  It takes 40-90 days to sell a property when it’s priced right.  It feels all too familar to me…

The economic forecasters (Which to me are like weather news broadcasters, they get paid to point and project, never being held accountable for any of  their predictions, or for their scare-tactics), these forecasters predict that by the early part of 2008 this valley foreclosure rate will rise to 10%.  Good news is we shall see the sub-prime fallout lighten by the mid 2009 timeframe.  It will be a much slower and gradual climb the next time around though.  Don’t think you’ll double your money in real estate either, it’s rare that we’ll ever repeat such a speculative market again, especially now with the harder, tighter lending restrictions and with interest rates going up.  I’ll be happy to make another huge profit in 5-10 years once this cycle works itself out or the American people forget. 

Bookmark my blog and log back in for my educated opinion on the best places to buy into in every price range and another cool article about what a million dollars get you in San Jose. 

For Further answers to your questions, link to:     http://www.amberlists.com/buying/index.cfm?page_ID=3524&TopicId=buy&SubTopicId=Appraisal

Heat Map and Price Evaluation For the San Jose, CA Area

http://www.trulia.com/home_prices/California/San_Jose-heat_map/